Allowable deduction for investment interest

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Reference no: EM13991874

Marjorie is single and has the following investment income:

Interest on savings	$2,900
Municipal bond interest	1,500
Dividends	7,600

She pays investment interest expense of $15,000. The interest expense relates to all the assets in her portfolio.

1. What is Marjorie's allowable deduction for investment interest?

2. Assume that Marjorie's marginal tax rate is 28%. If she sells stock that produces a long-term capital gain of $3,000, how will the sale of stock affect her investment interest deduction?

Reference no: EM13991874

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